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Richards Bullish on Nortel’s China Prospects
By Mark Evans | August 28, 2008
Barry Richards is, by far, the most bullish analyst on Nortel with a 12-month target price of $23.
Some of his enthusiasm for Nortel’s prospect lie in his belief that Nortel is well positioned to do well as China’s telecom market evolves, grows and consolidates. Among the activity is a merger between China Netcom Group and China Unicom, which combined have 279 million wireless and wireline subscribers.
Richards think Nortel could see huge dividends from the Unicom-Netcom merger as it supplies to both Unicom and Telecom. “This is a glorious opportunity for Nortel, already a supplier to both China Unicom and China Telecom,” he said in a research note. “Overall, China has the potential to pull Nortel’s business and its stock out of its long-term funk and we believe they are well positioned to exploit that market.”
The Chinese telecom market is fertile ground for telecom suppliers given carriers are spending billions of dollars to build new networks and upgrade exisitng ones. China Unicom, for example, said earlier this month it could invest as much as $14.6 billion (100 billion yuan) over the next two years to build a 3G wireless, while China Telecom plans to spend $11.7 billion.
Source: Ottawa Citizen
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